US open: Stocks rally on Greece optimism, as Nasdaq Composite notches new high

US stocks rallied early on Monday, as the Nasdaq Composite reached a new record in the wake of reports suggesting Greece and its creditors might be reaching a reform deal.

Just after 15:00 BST, the Dow Jones Industrial Average was up 136 points, while the S&P 500 and the Nasdaq gained 14 and 36 points respectively.

Greek stocks led European markets sharply higher, with Greece’s Athex Composite Index surging 6.26%, as investors grew hopeful that Athens will reach a last-minute deal with its creditors

An emergency summit will be held in Brussels on Monday, as Greece and its creditors attempt to reach an agreement.

Investors were optimistic that a deal could be reached after European Commission President Jean-Claude Juncker said the latest proposals from Greek Prime Minister Alexis Tsipras were a “good basis for progress.”

Analysts pointed out that not even Juncker’s warning that a deal was “not yet there” could pour cold water on investors’ enthusiasm.

“Even after all these years, a last-minute deal that, in reality, merely kicks the problems further into the year still has the power to inspire an equity market rally,” said Chris Beauchamp, senior market analyst, IG.

Having posted strong gains last week on the back of the Federal Reserve’s decision to raise interest rates at a very slow pace, Wall Street has very little data to look forward to on Monday.

Monday data

The US economy underperformed in May, according to the Chicago Fed's national activity index.

Figures released on Monday, showed the index, a weighted average of 85 different economic indicators, rose from -0.19 to -0.17, while the three-month average edged up from -0.20 to -0.16.

Meanwhile, sales of existing US homes rose at the fastest pace since 2009 in May, data from the National Association of Realtors showed.

According to the figures, existing home sales declined 5.1% month-on-month to a seasonally-adjusted annual rate of 5.35m, exceeding expectations for a rise to 5.25m.

In company news, natural gas pipeline giant Williams Cos surged 25.1% after revealing on Sunday it had rebuffed an unsolicited buyout bid worth $48bn from an undisclosed source.

Health and fitness products provider Fitbit jumped 13%, after soaring more than 50% on its debut on Thursday.

Internet TV network Netflix climbed 1.93% after the brokerage BTIG boosted its stock price target to a Wall Street-high $950, while healthcare services Cigna surged 6.40% after its board Sunday rejected a $47.5bn takeover offer from Anthem Inc.

Elsewhere, Asian markets closed higher boosted by news coming out of Greece, while the dollar shed 0.10% against the euro but rose 0.24% and 0.36% against the pound and the yen respectively.

Gold futures slid 1.24% to $1,187.00, while oil prices moved lower, with West Texas Intermediate losing 0.77% to $59.51 a barrel, while Brent crude fell 0.94% to $62.43 a barrel.